Russell Galley, managing director, Halifax Community Bank, said: "The annual rate of growth has picked up for the second consecutive month, rising from 2.6% in August to 4% in September.

"The average house price is now £225,109 - the highest on record. House prices in the three months to September were 1.4% higher than in the previous quarter, the fastest quarterly increase since February.

"While the quarterly and annual rates of house price growth have improved, they are lower than at the start of the year.

"UK house prices continue to be supported by an ongoing shortage of properties for sale and solid growth in full-time employment.

"However, increasing pressure on spending power and continuing affordability concerns may well dampen buyer demand."

Mr Galley also highlighted recent speculation on the possibility of an increase in the Bank of England base rate.

But he said: "We do not anticipate this will have a significant effect on transaction volumes."

Howard Archer, chief economic adviser at EY ITEM Club, said he expects house price growth to be "relatively muted" over the rest of the year, with a "modest" increase of 2% to 3% in 2018.

He said: "Housing market activity is likely to be hampered by fragile consumer confidence and limited willingness to engage in major transactions."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "We expect most of the pick-up in Halifax's index to unwind over the coming months."

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Mortgage rates continue to be competitive although swap rates have started edging up on the back of all the talk about interest rate hikes."

Mr Harris said that with some lenders having raised mortgage rates or being poised to do so: "Borrowers looking for one of the cheapest fixed-rate mortgages may wish to move sooner rather than later to secure one."